Rupee falls 2 paise to close at 79.80 against US dollar

The rupee pared its initial gains and settled 2 paise lower at 79.80 (provisional) against the US dollar on Monday, weighed down by the strength of the greenback in the overseas market.

At the interbank forex market, the local unit opened at 79.70 against the greenback. It witnessed an intra-day high of 79.59 and a low of 79.80 during the session.

It finally ended at 79.80, down 2 paise from its previous close of 79.78.

Also Read — India spending forex reserves at quicker pace than during taper tantrum

The dollar index, which measures the greenback's strength against a basket of six currencies, rose 0.26 per cent to 110.05.

Brent crude futures, the global oil benchmark, declined 1.52 per cent to $ 89.96 per barrel.

"King Dollar has been on a rampage against the Chinese yuan and further weakening of the yuan will be a dangerous sign for risk markets and Asian currencies," said Dilip Parmar, Research Analyst, HDFC Securities.

Along with the weak regional currencies, the rupee depreciated against the US dollar for the fourth day in a row. However, the momentum remained lacklustre in the rupee as the economy is better placed among Asian countries.

On the overseas front, risk assets extended their decline and the dollar rallied against major trading partners ahead of a busy week for global central banks, Parmar said, adding that in the near-term, spot Dollar- Rupee is expected to trade in the range of 79.05 to 79.90.

On the domestic equity market front, the BSE Sensex ended 300.44 points or 0.51 per cent higher at 59,141.23, while the broader NSE Nifty gained 91.40 points or 0.52 per cent to 17,622.25.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets, as they offloaded shares worth Rs 3,260.05 crore on Friday, according to exchange data.

On the domestic macroeconomic front, gross direct tax collections grew 30 per cent to Rs 8.36 lakh crore till September 17 of current fiscal year on higher advance tax mop-up buoyed by the economic revival post pandemic, the finance ministry said on Sunday.

Meanwhile, the country's foreign exchange reserves declined by dollar 2.234 billion to dollar 550.871 billion for the week ended September 9, the Reserve Bank of India (RBI) said on Friday.